Correlation Between Brixmor Property and Smart REIT
Can any of the company-specific risk be diversified away by investing in both Brixmor Property and Smart REIT at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Brixmor Property and Smart REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brixmor Property and Smart REIT, you can compare the effects of market volatilities on Brixmor Property and Smart REIT and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Brixmor Property with a short position of Smart REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brixmor Property and Smart REIT.
Diversification Opportunities for Brixmor Property and Smart REIT
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brixmor and Smart is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Brixmor Property and Smart REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart REIT and Brixmor Property is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Brixmor Property are associated (or correlated) with Smart REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart REIT has no effect on the direction of Brixmor Property i.e., Brixmor Property and Smart REIT go up and down completely randomly.
Pair Corralation between Brixmor Property and Smart REIT
Considering the 90-day investment horizon Brixmor Property is expected to generate 0.45 times more return on investment than Smart REIT. However, Brixmor Property is 2.23 times less risky than Smart REIT. It trades about 0.06 of its potential returns per unit of risk. Smart REIT is currently generating about 0.02 per unit of risk. If you would invest 2,048 in Brixmor Property on August 28, 2024 and sell it today you would earn a total of 954.00 from holding Brixmor Property or generate 46.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.78% |
| Values | Daily Returns |
Brixmor Property vs. Smart REIT
Performance |
| Timeline |
| Brixmor Property |
| Smart REIT |
Brixmor Property and Smart REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brixmor Property and Smart REIT
The main advantage of trading using opposite Brixmor Property and Smart REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brixmor Property position performs unexpectedly, Smart REIT can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Smart REIT will offset losses from the drop in Smart REIT's long position.| Brixmor Property vs. Site Centers Corp | Brixmor Property vs. Acadia Realty Trust | Brixmor Property vs. Netstreit Corp | Brixmor Property vs. Urban Edge Properties |
| Smart REIT vs. Phillips Edison Co | Smart REIT vs. Simon Property Group | Smart REIT vs. Inventrust Properties Corp | Smart REIT vs. Site Centers Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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